Method and apparatus for generating standardized carbon emission reduction credits

ABSTRACT

A method and apparatus for determining standardized carbon emission reduction credits is disclosed. General regional data and site-specific data, if available, are input into a carbon sequestration model to determine the approximate change in the level of carbon compounds stored in a media, such as soil, over a specified period of time. An uncertainty analysis is conducted on the results to quantify and normalize carbon emission reduction credits. Standardized carbon emission reduction credits may be compiled for trade and other carbon emission reduction credits are placed in reserve.

RELATED APPLICATIONS

The present application is a continuation and claims priority ofco-pending U.S. patent application Ser. No. 12/045,583, filed Mar. 10,2008 (to issue May 11, 2010 as U.S. Pat. No. 7,716,063), which is acontinuation and claims priority of U.S. patent application Ser. No.10/364,128 filed Feb. 10, 2003 (granted Nov. 25, 2008 as U.S. Pat. No.7,457,758), both applications being incorporated herein in theirentireties by this reference.

FIELD OF THE INVENTION

This invention generally relates to a method and apparatus fordetermining standardized carbon emission reduction credits and, moreparticularly, to a method and apparatus for generating, quantifying andconfirming standardized carbon emission reduction credits and reservecarbon emission reduction credits.

BACKGROUND OF THE INVENTION

An accelerating rate of change in the amounts of trace gases in theearth's atmosphere has the potential to modify the earth's energybalance, which may result in a variety of consequences. These tracegases are often referred to as greenhouse gases and include carbondioxide. Although there is disagreement concerning the potential threatsor benefits of this change, there is widespread agreement in the globalcommunity that it is prudent to enact policies to attempt to slow downthe rate of change. At the same time, research is underway to predictthe consequences of increasing greenhouse gas concentrations and todevelop the technology to economically limit those increases. Allcurrent protocols have established emission reduction targets thatdefine 1990 as the base year and specify reductions as a fractionalpercentage of emission rates during that base year.

The increasing concentration of greenhouse gases in the atmosphere is aglobal issue. For example, carbon dioxide emitted from a power plantinto the atmosphere has a lifetime of approximately 100 years and may bedistributed globally. As a result, at least for the issue of atmosphericgreenhouse gases, the geographic location where the greenhouse gases areremoved from the atmosphere is less important than the fact that theyare removed.

One of the key provisions of many national strategies to limit the rateof growth in the amounts of atmospheric greenhouse gases is the conceptof emissions trading. Emissions trading is a process whereby specifictarget emission rates of certain greenhouse gases are set for specificindustries. A member of the industry who achieves measured emissionsbelow the target rates may trade the difference on the open market toanother who exceeds, or forecasts that it will exceed, its own emissiontargets. An entity responsible for measured emissions above its targetrates may be subject to fines or other sanctions. The objective is toreduce the overall emission of greenhouse gases in the atmosphere, evenif the emissions of one particular source are not decreased, or indeedare increased.

The unit of measure of tradable carbon emissions that has been generallyaccepted is commonly known as the Carbon Emission Reduction Credit, orCERC, which is equivalent to one metric ton of carbon dioxide gas (orother greenhouse gas equivalent) that is not emitted into the earth'satmosphere due to a human-caused change. That is, a CERC can begenerated for human activities that have occurred since 1990 that haveresulted in a reduction of business-as-usual emissions of greenhousegases.

For example, CERCs can be generated through energy efficiency gains offossil fuel technology, substitution of biofuels for fossil fuels, orremoval of greenhouse gases from industrial gas streams. CERCs also canbe generated by sequestration of atmospheric carbon dioxide into land orwater, e.g., by reforesting land or through implementation ofagricultural practices that increase the storage of organic matter inthe soil.

A market is emerging for trading CERCs. One type of CERC tradinginvolves an industrial consortium, where each industrial entitydetermines a rough estimate of the number of CERCs generated by itsactivity or needed from others due to its activity. If an individualentity has generated CERCs by changing its business-as-usual activity,e.g., by reducing the amounts of greenhouse gases emitted, it can tradethe CERCs to others in the consortium.

There also have been entities involved specifically in CERC tradingbased on increasing the storage of carbon in soil. For example, in 1999a consortium of Canadian power companies hired an insurance company tocontractually obligate a group of Iowa farmers to twenty years ofno-till farming. Based on general data, a broker for the power companiesassumed that this land management practice would result in sufficientsequestration of carbon into the soil to generate CERCs. The powercompanies also purchased an insurance policy for protection against thepossibility that no CERCs, or insufficient CERCs, would be generated bythis arrangement. This trade was designed by the consortium of powercompanies to minimize the price that the farmers were paid. Thedifficulty and uncertainty of predicting these CERCs, obtainingindemnification or insurance, and banding together a sufficiently largenumber of farmers to generate a pool of potential CERCs large enough toovercome substantial baseline transactional costs and uncertaintywhether the CERCs generated would meet current, pending or futureregulatory requirements operated to drive up the costs incurred by thepotential CERC purchasers, drive down the price paid to the producersand generally make it difficult to establish and engage in a market forCERCs.

Existing natural resource-based methods to trade CERCs generally share anumber of shortcomings. Typically, the contracts specify certain landmanagement practices, but do not require a certain number of CERCs to begenerated. The estimated CERC values are highly variable and minimizeddue to uncertainties caused by using general regional data to try toestimate CERCs and by high transactional costs. Without a reasonablyaccurate method of quantifying CERCs generated, it is difficult for allto place a fair value on the trade. Also, trades generally have beendesigned and instigated by a potential CERC purchaser, or an entityrepresenting one, and not by the CERC producer, such as a farmer orlandowner. Further, each trade must be individually designed by the CERCpurchaser to be consistent with current and anticipated legislativerequirements and to maximize the likelihood that CERCs will begenerated. Competition is also limited by the requirement of projectslarge enough to achieve economies of scale. As a result, the price paidto CERC producers is driven down and the market for trading CERCs islimited.

In the absence of an accepted process to generate, quantify andstandardize CERCs, especially CERCs generated or projected to begenerated by carbon sequestration in land or plants, the market for suchCERCs remains relatively primitive, inefficient and uncertain. Theexisting attempts to identify and trade CERCs suffer from difficultiesin quantifying accrued and projected CERCs, high administrative costs inquantifying and indemnifying accrued and projected CERCs, and the lackof a market for individuals and individual entities to effectivelyengage in CERC trades. These problems particularly restrict the abilityof an individual landowner, or groups of landowners, to efficientlygenerate, quantify, standardize, market and trade CERCs.

As such, a need exists for an improved method of generating, quantifyingand standardizing CERCs, particularly so that a relatively smallerproducer of CERCs, such as an individual landowner or groups oflandowners, may be able to reliably and efficiently participate in amarket for CERCs by generating and quantifying standardized CERCs by amethod capable of adapting to meet a broad range of regulatoryspecifications.

DESCRIPTION OF THE DRAWINGS

FIG. 1 is a flow chart depicting one embodiment of the invention togenerate standardized carbon emission reduction credits and reservecarbon emission reduction credits.

FIG. 2 is a flow chart depicting another embodiment of the invention togenerate standardized carbon emission reduction credits and reservecarbon emission reduction credits.

FIG. 3 is a flow chart depicting data components of site-specific dataused to generate standardized carbon emission reduction credits andreserve carbon emission reduction credits of one embodiment of theinvention.

FIG. 4 is a flow chart depicting data components of general data used togenerate standardized carbon emission reduction credits and reservecarbon emission reduction credits of one embodiment of the invention.

FIG. 5 depicts an apparatus of the present invention to generatestandardized carbon emission reduction credits.

DESCRIPTION OF THE INVENTION

This invention generally relates to a method and apparatus fordetermining standardized carbon emission reduction credits and, moreparticularly, to a method and apparatus for generating, quantifying andconfirming standardized carbon emission reduction credits and reservecarbon emission reduction credits.

In general, there are six elements of a CERC: 1) a baseline of emissionsof specific greenhouse gases as a result of business as usualactivities; 2) additivity; 3) permanence; 4) leakage; 5) ownership; and6) verification. The business as usual baseline generally refers to thelevel of greenhouse gas emissions from continuing current managementpractices in that particular industry. In the case of farmers, businessas usual typically is defined as conventional tillage agriculture, butmay be specifically determined for each land parcel based on the landmanagement history. Further, the business as usual baseline may bedefined as an average of a larger community, rather than a business asusual for an individual or a single entity.

The second element is additivity, which generally refers to humanactivity that causes a reduction in business as usual emissions. Thatis, the change between the level of greenhouse gas emissions under thebusiness as usual baseline and the lower level of emissions must becaused by human intervention. In the case of farmers, this typicallymeans changing land management away from the business as usual practiceof conventional tillage agriculture. Even with crops removing carbondioxide from the air, conventional tillage agriculture typically resultsin a net release of carbon dioxide into the air due to oxidation ofcarbon compounds contained in the soil. In general, as tillage intensitydecreases, thereby decreasing the amount of soil exposed to the oxygenin ambient air, carbon turnover also decreases, resulting in a decreasein the net carbon dioxide emissions into the atmosphere. A change tominimum tillage, or to no tillage at all, typically results in lesscarbon dioxide emitted or even a net sequestration of atmosphericcarbon. A change from cropland to grassland can result in thesequestration of substantial amounts of carbon dioxide in the form oforganic carbon compounds that can accumulate in grassland soils. Humanactivity other than, or in addition to, changing land management awayfrom conventional tillage agriculture may also be employed to cause areduction in business as usual emissions.

The third element is permanence. The general objective of emissionstrading is to reduce atmospheric concentrations of greenhouse gases toallow time to develop the technology to decrease emissions into theatmosphere directly from the source. In this case, permanence typicallyis defined as the storage of carbon dioxide in the form of biomass orsoil organic carbon for a time period specified by regulation, typicallytwenty or thirty years. Generally, residence times for carbon removedfrom the atmosphere by forests can exceed decades, whereas soil carboncan have residence times that exceed hundreds to thousands of years.

The fourth element is absence of leakage, which generally means that thechanged human activity intended to generate a CERC does not result in anundesirable increase in greenhouse gas emissions in any part of thebiogeochemical cycle. In the case of carbon sequestration, CERCs aremore valuable if the landowner can demonstrate that the changed humanactivity that resulted in generation of the CERCs does not result inincreased emissions of other gases, such as nitrous oxide or methane, ascompared to business as usual emissions.

Another element to maximize the value of a CERC is documentation ofownership. That is, the entity offering to trade or sell a CERC mustdemonstrate that it is the owner of rights to the CERC. Although thistypically will be the landowner-operator in the case of soil carbonsequestration, other scenarios are possible, e.g., where by agreement oroperation of law another has rights to use all or part of the land.

Yet another requirement is verification, which generally refers to theability of a third party to verify the generation of the CERC through anapproved accounting process. Verification typically requires that theprocess employed be transparent, i.e., the process is documented so thata third party may review, analyze, understand and replicate it. Forexample, verification may include audits of data to ensure accuracy. TheCERC value generally will be maximized where the process employed toestablish the CERC directly corresponds to the method of verification.

Direct measurement of the absolute amount of carbon sequestered in agiven parcel of land is difficult and expensive. Further, the absoluteamount of carbon in a specific soil sample may be highly variable forsamples collected at individual points within the parcel of land, due tothe mean residence time of organic matter in soils often being on theorder of 1,000 years and due to soil characteristics often being quitespatially variable. Therefore, it may not be practical to obtain anaccurate, precise, reproducible, cost effective direct measurement ofthe relatively small amount of carbon added to, or subtracted from, aland parcel over a period of several years to decades, the time periodsrequired by current and pending legislative protocols.

This invention recognizes that, although the total amount of carbon in aspecific soil sample may be quite variable, the incremental carbonstored as a result of specific land management practices over periods ofdecades is much less variable, particularly since most soils have beentilled in the past, at least in the United States and much of theindustrialized world. This is because previously tilled soils containlevels of organic carbon that are much lower than their organic carbonsaturation levels and therefore carbon storage over periods of decadesis relatively insensitive to soil carbon variability.

This invention also recognizes that, to generate and quantify accruedand projected CERCs with reasonable accuracy, it is not necessary tomeasure the total organic content of the entire soil profile, or eventhe absolute amount of carbon added to, or subtracted from, the soilsince 1990. Rather, this invention recognizes that standardized CERCsmay be generated and quantified by estimating the incremental carbonstored in the soil over time, e.g., since 1990.

This invention further recognizes that carbon sequestration can beconceptualized as a national issue, which allows one to reconcileaggregate sequestration estimates with continental-scale carbon fluxestimates. That is, by compiling CERCs from a number of landowners, onemay more readily generate and quantify accrued and future CERCs withreasonable accuracy for the compilation than for a single or smallergroup of landowners. Therefore, the allocation of CERCs from thecompilation to individual land parcels need not precisely accurate.However, to be fair to the individual landowner, the quantificationsystem used should be transparent, reproducible, traceable andverifiable.

One embodiment of the invention is directed to generating andquantifying standardized CERCs for a parcel of land through the use ofgeneral data for a given region encompassing the parcel of land byutilizing a carbon sequestration model and an uncertainty analysis. Thatis, it would not be necessary to have detailed, long term site-specificdata for a parcel of land. Preferably, the general data for the regiondates back as far as possible, more preferably back to approximately1900 and the region is as small a geographic region as possible, such asa county in the United States. If available, site-specific data also maybe used. More preferably, site-specific data from 1990 to date is used,along with the general data, to determine the standardized CERCs andreserve CERCs through a carbon sequestration model and uncertaintyanalysis.

Referring to FIG. 1, one embodiment of the invention is depicted by aflow chart showing a method of generating standardized CERCs and reserveCERCs. General data is obtained 12, preferably from a databasecontaining geographically referenced data relevant to carbonsequestration in soil. As shown in FIG. 3, such general data 70 mayinclude one or more of general land use history data 72, general climatedata 74, general soil texture data 76 and other data 78. Site-specificdata 14 preferably also is obtained, more preferably from the landowneror other rights holder to the parcel of land. As shown in FIG. 4, sitespecific data 80 may include one or more of recent specific land usehistory data 82, preferably since 1990 or other year from whichstandardized CERCs are desired to be generated, less recent specificland use history data, preferably from before 1990 or other year fromwhich standardized CERCs are desired to be generated, specific soiltexture data 86 and other data 88. General data 12, preferably with atleast some site-specific data 14, are used to determine the approximatechange in the level of carbon storage in a media over a specified timeperiod 40 through the application of a carbon sequestration model. Aconfidence threshold is identified 42 and the standardized CERCs andreserve CERCs are determined 50 through the application of anuncertainty analysis. The method can be employed to generatestandardized CERCs and reserve CERCs accrued over a specific timeperiod, such as from 1990 to date, and/or project standardized CERCs andreserve CERCs based on projecting certain general data and site-specificdata for a specified time period.

Alternatively, as shown in FIG. 2, the geographic location of the landparcel is obtained 10 and used to obtain relevant general data for thatland parcel from data stored in a database containing geographicallyreferenced data relevant to carbon sequestration 12.

Also as shown in FIG. 2, the general data and/or the site-specific dataalternatively may be tested. One such test 16 may be to determine if thegeneral data and the site-specific data is sufficiently complete toallow the method to generate standardized CERCs. A first negativeresponse 18 preferably initiates a request to obtain additionalsite-specific data 14. A second negative response 20 preferablyinitiates a request to obtain additional relevant general data for theland parcel from the general database 12. A third negative response 22preferably initiates a stop command 24. A positive response 26 allowsthe method to continue.

Another test 28 that may be conducted is to determine whethersite-specific data are within prescribed ranges or values of possibleresponses. A negative response 30 preferably initiates a stop command32. A positive response 34 allows the method to continue.

In another embodiment of the invention, a combination of elements canprovide an integrated system to generate and quantify standardizedCERCs. These elements can include a systematic approach for gatheringand managing data, a modeling component for estimating CERCs based onavailable information, a scenario module to help landowners develop bestmanagement strategies for generating CERCs, a system to quantify theuncertainty and risk, and strategies for auditing and verifying datainputs that are consistent with current, pending and future greenhousegas emissions legislation.

Yet another embodiment of the invention, a method is employed 1) togenerate and quantify standardized CERCs that have accrued over aspecific time period, such as from 1990 to the present date, and/or 2)to generate and quantify standardized CERCs that are projected to existfrom the present date to a specific date in the future, based on landmanagement practices or other commitments by the landowner, and/or 3) toadvise a landowner of standardized CERCs that would be projected toexist based on commitments to one or more land management practices.

International greenhouse gas emission reduction protocols, such as theKyoto Protocol, typically specify 1990 as the base year upon which toestablish greenhouse gas emission reductions. Therefore, CERCs can begenerated by demonstrating human-caused incremental carbon storage since1990 compared to business as usual emissions. To estimate theincremental amount of carbon stored in the soil since 1990 for aspecific land parcel, it is preferred to determine the available carbonreservoir, if any, of the soil from the identified land parcel. That is,it is preferred to determine whether the land parcel containsessentially all the carbon it is capable of containing, or whether thesoil has a capacity to store additional carbon. If the carbon reservoiris not full, the land parcel may be amenable to land managementpractices to increase carbon storage and thereby demonstrate the elementof additivity. The soil carbon reservoir need not be determinedprecisely, since the sequestration rate of carbon into soil isrelatively independent of how much carbon is in the reservoir, as longas it is not full.

Several different carbon models are available to determine the availablecarbon reservoir, if any, within the soil and/or vegetation located on aparticular land parcel. The type and level of detail of the requireddata are dependent on the carbon model employed, although typically suchdata may be characterized as general and site-specific. General data mayinclude any data that has an impact on sequestration of atmosphericcarbon and that is not necessarily specific to a particular land parcel,and preferably includes crop behavior, soil response, carbon behaviorand calibration, as well as typical soil texture and land use referencedby geographic region or location. Site-specific data may include anydata about the specific geographic site in question that has an impacton sequestration of atmospheric carbon, and preferably includes climatedata, soil texture and land use history directed to the specific parcelof land.

For example, crop behavior refers to the impact of particular crops inincreasing carbon storage in soil, which is readily available fortypical crops, such as corn or soybeans. Climate data may includehistorical records of temperatures, precipitation, winds, etc., which iswidely available in the United States through a variety of sources, suchas the National Weather Service. The soil texture for a given geographiclocation can be determined in a number of ways, such as testing orpublic records, preferably by reference to NRC S, SSURGO data and/orSTATSGO data.

Land use history generally refers to the land management practicesemployed over a period of years. Land use history data may becharacterized as general land use history data and site-specific landuse history data. General land use history data may be typical andaverage data for a geographic area encompassing the parcel of land, suchas a nation, state, or preferably a county in the United States, and mayinclude typical practices in the given geographic area, such as types ofcrops, tillage methods, fertilization, irrigation, grazing, planting andharvesting practices, and other practices affecting carbonsequestration. General land use history data may be available fromnational, regional, state, county and local sources, such as the U.S.Department of Agriculture and other federal agencies, individual stateagencies and county extension offices and other local sources.

Land use history data may also be characterized as site-specific, whichmay include the actual land management practices employed on that landparcel during specified time periods, e.g., types of crops, tillagemethods, fertilization, irrigation, grazing, planting and harvestingpractices, and other practices affecting carbon sequestration.Preferably, specific land use history data for a land parcel can beobtained from information provided by the landowner or, alternatively,from other historical sources, such as government and historicalrecords, or from both sources.

Preferably, a numerical model known as CSU Century, developed atColorado State University, is employed. CSU Century is a well acceptednumerical modeling computer program designed to generally predict howmuch carbon is sequestrated in various ecosystems over time. It wasdeveloped originally for grassland ecosystems, but has been found to beaccurate for a wide range of ecosystems, ranging from the tropics ofAfrica to the Boreal regions of Canada. The CSU Century programgenerally requires extensive data regarding land use history, climateand soil texture, among other things.

As noted, the invention recognizes that standardized CERCs may begenerated and quantified without calculating the absolute amount ofcarbon in the soil profile. Rather, the incremental carbon stored in thesoil over time, and especially since 1990, may be approximated. Thisrecognition greatly simplifies the analysis by allowing the use of lessdetailed and less complete data, particularly as the time period inquestion lengthens.

For example, when used to determine the total organic carbon reservoirof an area of land, the CSU Century program generally requires extensiveand detailed land use history data over relatively long periods of time,including, among other things, the types of crop, the amounts offertilizer and when applied, the types and frequency of cultivation,irrigation amounts and when applied, organic matter additions, grazingsystems, planting and harvesting dates, and the types of harvest. Thesedata are gathered together as schedule files for use in the Centuryprogram. The present invention simplifies the use of carbonsequestration models by, among other things, recognizing that relevantdata from greater than 100 years ago may be relatively general andincomplete, data from approximately 1900 to 1990 preferably may be morespecific and more complete than the older data, but need not necessarilybe so, and data from 1990 to date preferably may be relatively even morespecific and even more complete.

Preferably, general data regarding typical land management practices,climate and soil texture from approximately 1900 through at least 1990can be collected from national, regional, state, county and/or otherlocal public records, compiled and converted into detailed schedulefiles to create a general database. Preferably, the general databasecontains general data relevant to carbon sequestration and referenced bygeographic information, such as by nation, state, country, longitude,latitude and/or other geographic reference. General data from 1990 todate also may be collected and compiled in the database.

The data in the general database more preferably can be compiledindependently of individual landowner input or data and can generate ageneric land use history for selected regions or locales. Such a genericland use history may have several uses. For example, generic land usehistories can be used to define the ranges of plausible responses thatare likely to be given by individual landowners within the geographicregion. If landowner responses fall outside of these prescribed ranges,the response can be targeted for verification and auditing. Also, ifsite-specific data are unavailable or incomplete for a given landownerin that geographic area, general data may be used to substitute for orsupplement site-specific data. A generic land use history based ongeneral data for a particular region alternatively could be used for allof the land use history for a given land parcel within the region.

Preferably, the general database may provide much of the data requiredby the carbon sequestration model to determine the available carbonreservoir, if any, and to generate and quantify standardized CERCs, bothaccrued and future. It is particularly advantageous for the generaldatabase to contain sufficient data for the time period prior to 1990for the carbon sequestration model to determine the available carbonreservoir, if any. With public records providing the data for the timeperiod prior to 1990, verification of resulting CERCs is simplified andexpedited and the documentation requirements placed on the landowner aresignificantly reduced, thereby reducing barriers for the landowner toengage in the CERC market and increasing the value of such engagement byreducing uncertainty.

Site-specific data, preferably from the landowner, also may be used forcertain land use history since 1990, such as the types of crops,tillage, fertilizer, irrigation, organic matter and grazing since 1990.More preferably, the landowner can provide and document detailedsite-specific data, such as the crop type, the type and time periods oftillage, the type, amount and time periods of fertilization, the type,amount and time periods of irrigation, the type, amount and time periodsof organic matter additions and the type and number of animals grazing,if any. Most preferably, the available information is provided forrelatively short time intervals, such as by month. The landownerprovided site-specific data also may be converted to detailed schedulefiles and stored in a data base.

To supplement or substitute for missing, incomplete or less accuratesite-specific data, general data may be used, preferably from thegeneral database. As the site-specific data are less accurate and/orless complete, the resulting CERCs will have a greater uncertainty,resulting in fewer standardized CERCs being generated and quantified, asdescribed below. Similarly, if certain site-specific data are notavailable from either public records or the landowner, general data maybe substituted, at the cost of increasing the fraction of CERCs held inthe reserve pool.

Inputting the general data and available site-specific data into thecarbon sequestration model can provide an initial analysis of whether ornot the carbon reservoir of a land parcel is full and define the netcarbon flux for the business as usual scenario. If this analysis showsthe possibility of additivity, then more specific and more recent datafrom 1990 may be used, if available, to determine incremental carbonstorage for the period beginning in 1990 to the year of the analysis.

Similarly, the incremental carbon to be stored in the soil into futureyears may be projected, preferably based on the data already inputted,e.g., based on continuing current land use practices previously inputand based on entering variables not dependent on landowner behavior,such as long term weather projections. Also, the potential for storingincremental carbon into the future also may be projected by changing atleast one variable that is dependent on landowner behavior, e.g., landuse practices, particularly those associated with increasing carbonstorage in soils.

In a preferred embodiment, future carbon storage can be determined basedon the landowner providing alternative land use management practicesthat could be employed into the future. The relative carbonsequestration potential for each potential land use management practicecan be determined by the methods described above and reported to thelandowner. More preferably, the carbon sequestration potential for eachalternative land use management practice can be determined through theuse of a look-up table consisting of a series of scenarios that havebeen pre-analyzed for regionally important variables. Even morepreferably, the landowner may provide such alternative land usemanagement practices through an interactive media that is capable ofidentifying certain variables, offering alternatives to one or morevariables, generating and quantifying standardized future CERCs based onthe selected alternatives and providing a report. The results preferablycan be used by the landowner to assess variables to maximize thegeneration of CERCs and their value.

After the quantity of accrued and projected incremental carbon storageis determined, the results may be subjected to an analysis to check thedata and the modeling. Preferably, the data provided by the individualCERC producer can be analyzed to verify that the data is within expectedor prescribed ranges. Data found to be outside of such ranges can beflagged for independent verification and auditing.

The results also may be subjected to an analysis of uncertainty. Thisinvention recognizes that the use of an uncertainty analysis can allowthe use of general data for input variables into carbon sequestrationmodels to determine the approximate change in the level of carboncompounds in soil over specified time periods. The use of general datain such models is particularly advantageous for data for years datingback into time, such as prior to 1990 and back as far as 1900 orearlier, for which site-specific data may be difficult or impossible todocument.

The uncertainty analysis allows one to quantify the relative level ofuncertainty in the results of the sequestration model and express it asstandardized CERCs and reserve CERCs, as explained in more detail below.

An uncertainty analysis generally performs a number of simulation runsin which certain key input variables are allowed to range across adistribution of reasonable values. The results for each simulation thencan be compiled and compared to determine the potential range ofvariation in carbon sequestration due to uncertainties in the inputdata. For example, an uncertainty analysis generally takes a given rangeof the input data and determines a range of possible results.

Preferably a Monte Carlo uncertainty analysis is employed, although avariety of other methods may be used. In a Monte Carlo uncertaintyanalysis, input variables that affect the result are randomly assignedvalues that follow a particular distribution, such as Gaussian, althoughother distributions may be used, if more appropriate. A number ofsimulations are conducted, each time again randomly assigning values tothe key input variables. From the results accumulated from thesimulations, the actual distribution U of values arising from theuncertainty in the key variables can be determined. If, for example, theactual distribution U is Gaussian, a mean value X and a standarddeviation S may be determined using standard statistical equations. Xand S define a distribution of possible CERC values for that landparcel. According to the properties of a Gaussian distribution, X isconsidered the most probable value and S defines a spread of possiblevalues around the mean.

To quantify the number of standardized CERCs for a land parcel, aconfidence threshold C may be defined in terms of the standard deviationof the calculated Monte Carlo distribution and expressed as aprobability, P=f(C), that the standardized CERCs will actually be storedin the soil. For example, if C is chosen to equal 0.95, then for anormal two-tailed Gaussian distribution, f(0.95)=2S and the standardizedCERCs would be equal to X-2S, and the reserve CERCs would be equal to2S. In that example, one may characterize the standardized CERC in termsof being 95% confident that one metric ton of carbon is or will beactually stored in the soil The actual threshold C used in commercialpractice may vary, e.g., for different applications, for differentcollections of CERC producers, for different potential CERC purchasersand other variables. The preferred threshold C is approximately 0.90 orhigher.

One advantage of this approach is that the analysis may be immediatelyset up using standard Gaussian input distributions, but the expecteddistributions of input variables may be refined over time as more databecomes available, such that the distribution of random values may mimicmore closely the distribution of values likely to actually occur.

In general, as the number of Monte Carlo simulations increases, theaccuracy of the results increases. Preferably, a complete uncertaintyanalysis is conducted on each parcel of land to best characterize theuncertainty associated with that land parcel. Preferably, approximately100 to approximately 1,000 small runs are conducted. Test results haveshown that 800-1,000 simulation runs produce a stable distribution ofresults. Additional or different simulations can be run to furtherimprove the accuracy of the results, particularly as computingtechnology continues to improve. However, current system constraints maylimit the number of simulation runs per land parcel and other factorsmay reduce the number of simulation runs that can be conducted.Additional test results have shown that approximately 200 simulationruns for each land parcel can produce an uncertainty distributionsimilar to the results of 1,000 simulation runs and thereby provide areasonable estimate of uncertainty for individual land parcels. Thispreferred embodiment of approximately 200 simulation runs currentlyprovides a reasonable balance between accuracy and practicality, whilestill providing a customized uncertainty analysis for each parcel ofland.

In addition to the uncertainty analysis for each parcel of land,additional uncertainty analyses may be conducted to improve thereliability of the results and to better understand the uncertaintydistribution U, among other things. Again, a Monte Carlo uncertaintyanalysis is preferred, wherein the results for one or more of the landparcels may be subjected to a similar analysis, but with a greaternumber of simulations, more preferably approximately 1,000 simulationruns. A greater number of simulations, conducted repeatedly for manylandowners, can provide information on the form of U and assist inchoosing the preferred function to calculate P=f(C), all as would berecognized by one skilled in the art.

In addition, these additional simulation results may be compared withthe results for 200 simulation runs. From each 1,000 simulation runs,subsets of 200 simulation runs may be extracted to determine and comparetheir statistical means and standard deviations to those of the 1,000simulation runs. This data preferably may be used to determine theamounts by which the results of a 200 simulation run set differs fromthe results of a 1,000 simulation run. For example, if a 200 simulationrun subset is found to typically underestimate the uncertainty range by2%, that variation may be added to the uncertainty calculated for eachland parcel.

Land parcels may be randomly selected for these 1,000 simulation runs,although preferably each land parcel is selected. Using currenttechnology on a single workstation, approximately 10 sets of 1,000simulation runs can be run in one day. Depending on the number oflandowner registrations received per day, this may result in as few asseveral percent or as many as 100% of landowners could be selected forfull analysis. Additional workstations may be dedicated to running thesesimulation runs, if necessary or desirable. Preferably, a minimum ofapproximately 5% of all land parcels would be subjected to these 1,000simulation runs.

Additional audits may be conducted. For example, selected input data maybe compared with satellite imagery or Farm Service Agency records toindependently confirm land use histories. For example, a landowner'sassertion that corn had been planted on a land parcel during a specificyear dating back to approximately 1980 may be verified by selectedlandsat images. Candidates for this type of auditing preferably would beidentified by specific indicators, such as certain landowner responsesfalling outside of expected ranges, e.g., as established by the generaldatabase. Some candidates also could be selected at random.

Although carbon sequestration is sensitive to many variables, thosevariables have been shown to be definable fairly accurately. In testsconducted according to the invention, data for sample parcels of land inSouth Dakota generally have resulted in an uncertainty of approximately5% for most runs conducted on the key variable of soil texture. Otheruncertainties, such as future climatic variables, can be evaluated aspart of the uncertainty analysis and generally will tend to be additive.

From the results of the uncertainty analysis, a fraction of the CERCsgenerated may be standardized and identified as available for trade,with the remaining CERCs placed in reserve. For example, if the totaluncertainty calculated were approximately 5%, preferably approximately95% of the CERCs generated would be certified as standardized CERCsavailable for trade and the remaining approximately 5% would be placedinto a reserve pool. In that example, if 100 CERCs had been calculated,then up to 95 standardized CERCs could be certified for trade and 5CERCs would be included in the reserve pool. In the future, as data andcarbon sequestration certification technology improves, the reserve poolpreferably may be reduced. Conversely, if future climate change or otherfactors caused the uncertainty to increase, the reserve pool preferablymay be increased. The actual percentage variation is currently beingdetermined by uncertain analysis and may be greater than the aboveexample of 5%. Through this process, each CERC certified and traded maybe standardized, such that it is equal in value regardless of where itwas generated. That is, a standardized CERC generated and quantified bythe present invention may be a tradable commodity.

The CERCs can then be compiled for trade, preferably in an open marketto a variety of potential CERC purchasers. Preferably, additionalstandardized CERCs from one or more other CERC producers, from a varietyof sources and geographic locations, can be additively pooled toincrease the size and value of the compilation. Through such a system ofthe present invention, CERC generators and CERC purchasers can morereadily communicate and evaluate the availability of CERCs ofdemonstrated quality and quantity, resulting in a lower risk to the CERCpurchaser, higher price to the CERC generator and a more equitableresult for all involved.

The quantity of incremental carbon storage that was initiallycalculated, but determined to not meet the established standards for aCERC certified for trade, may be identified and retained in a reserve orindentification pool. Preferably, these results and the underlying dataare maintained and combined in the indentification pool with similarresults and data from other landowners. This process preferably mayreduce or eliminate the need for CERC purchasers to buy relativelyexpensive insurance for protection against the carbon storage being lessthan expected.

The standardized CERCs, whether accrued or projected, also may besubjected to confirmation or testing. This invention recognizes that, bycollecting and offering for trade a collection of CERCs generated byland use management of a number of landowners over a relatively largergeographic area, the aggregate reduction of business as usual greenhousegas emissions need only be independently confirmed, e.g., by regulatoryagencies. That is, the accuracy of CERC generation for an individualparcel of land within that aggregate generally would not be an issue tothe CERC purchaser. Generally, as the land area increases, the testingfor CERC generation becomes easier, more accurate and more costefficient. For example, CERCs generated over a several hundred orseveral thousand square mile region are more readily susceptible totesting, such as by reconciling with ambient carbon dioxideconcentrations and isotopic tracer techniques.

For the global CERC market, the potential CERC purchaser is concernedthat the number of CERCs actually has been, or will be, generated to thesatisfaction of the applicable governing bodies. Currently, thistypically requires independent verification to determine that the methodto generate and quantify the CERCs is transparent and repeatable. In thelong run under current protocols, the aggregate carbon balance of anentire nation would be validated based on independent assessmenttechnology. In the case of carbon sequestration, the validation wouldlikely be based on the results of intensive long term research atselected research sites and it is unlikely that each parcel of land, ora random selection of parcels of land, would be tested. Currently such aprocess would be difficult scientifically and not feasible economicallyfor each CERC trade. However, additional technological and scientificimprovements could change those dynamics to allow individual or randomverification. Such advances can be readily incorporated to generate andquantify standardized CERCs according to the present invention.

In another embodiment of the invention, standardized CERCs may begenerated and quantified by identifying categories of information todetermine the relative level of carbon sequestration, obtainingavailable information, estimating the change in carbon storage in aselected media since 1990, estimating the change in carbon storage inselected media into the future depending on certain input variables,conducting an uncertainty analysis and quantifying standardized CERCs.

In a preferred embodiment of the invention, individual CERC producerscan register and provide site-specific data regarding carbonsequestration, the producer provided site-specific data may be combinedwith general data from a general database of previously acquiredinformation, and input into a carbon sequestration model, incrementalcarbon storage can be calculated that has been previously generatedand/or that is projected to be generated, the calculated result can besubjected to an uncertainty analysis to quantify the number of CERCsthat meet an established standard of certainty, the standardized CERCscan be collected into a primary pool with standardized CERCs from otherlandowners, other incremental carbon storage can be collected into areserve pool with similar results from other landowners, and the primarypool can be marketed to potential CERC purchasers. As data and/oranalyses is improved or updated, incremental carbon storage from thereserve pool may be released to the primary pool. This invention allowsan individual landowner, or a group of landowners, to generate,quantify, certify, market and trade standardized CERCs, both accrued andprojected.

For the example of an individual or individual entity landowner, thelandowner preferably may identify the parcel of land and receive anadvisory report that quantifies possible accrued and/or futurestandardized CERCs, based on the previously stored general data in thedatabase. Alternatively, the landowner may be requested to provideavailable site-specific data in response to particular inquiresregarding the land and land use history in order to generate a morecustomized advisory report. Preferably, the advisory report wouldinclude the number of accrued standardized CERCs determined to beavailable for trade and the quantity of reserve CERCs. Alternatively,the landowner can select to change one or more of the input variablesregarding future land management practices and receive a report thatincludes projections of future standardized CERCs based on the one ormore changed input variables. The landowner preferably may conductmultiple analyses to better assess the impact of certain land managementpractices on CERC generation.

In another embodiment of the invention, a method to generate andquantify standardized CERCs includes obtaining selected information fromat least one landowner, obtaining selected information from a data base,inputting selected information from the landowner and from the data baseinto a carbon sequestration model to determine the approximate change inthe level of carbon sequestered in the land parcel over a specified timeperiod, conducting an uncertainty analysis on the results and providinga report to the landowner.

Information from a landowner preferably is obtained through aninterface, which may be any media through which the landowner mayidentify the geographic location of the land at issue and optionallyinput other data, such as land use history data, relevant to carbonsequestration. For example, the interface may involve the landownermanually completing written forms, verbally responding to inquiries,forwarding other documentation or information, otherwise providingrequested data or combinations thereof.

In a preferred embodiment, the interface comprises an automated inquiryand response system, allowing the landowner to input certain informationin response to certain inquiries. For example, the interface preferablywould request the landowner to identify the landowner, the parcel ofland and other site-specific data relevant to carbon sequestration. Morepreferably, the results from the landowner interface are compared with adatabase containing general data, and optionally site-specific data,relevant to generating and quantifying standardized CERCs to identifymissing, incomplete or mis-entered data and to request additionalinformation.

The interface also preferably requests site-specific data regarding theland and land use history of that parcel of land, including the actualland use practices employed during specific time periods, e.g., types ofcrops, tillage, fertilizer, irrigation, etc., as described in moredetail above. More preferably, detailed and documented site-specificdata is requested on a monthly basis for each year dating back to atleast 1990.

In a more preferred embodiment, the interface includes a websiteaccessible to a potential CERC producer that facilitates the data inputfrom the potential CERC producer. Additionally, the website preferablyincludes additional information and reference material, such asbackground information regarding carbon sequestration and the globalCERC market, current news relevant to CERC markets, a description of theprocess employed to generate and quantify standardized CERCs and theindemnification pool, a compilation of statistics relating to CERCs, anda compilation of accrued and projected CERCs from other CERC producers.

The database may be any compilation of data relevant to sequestration ofatmospheric greenhouse gases and preferably includes a compilation ofgeographically referenced information. Preferably, the database containsboth site-specific data and general data that have an impact onsequestration of atmospheric greenhouse gases. As described above,site-specific data preferably includes climate, soil texture and landuse history, among other things, and general data preferably includescrop behavior, soil response, carbon behavior and calibration, amongother things. More preferably, the general data can be obtained frompublic records and placed in a format referenced or indexed bygeographic location.

The site-specific data from the landowner and the relevant general datafrom the database can be input into a carbon sequestration modelingprogram to determine the available carbon reservoir, if any, in theparticular parcel of land and the incremental carbon stored in the landsince 1990. Again, preferably the CSU Century program is employed tomake this determination.

The information from the landowner may be entered into the carbonsequestration modeling program in a variety of ways, preferably datainput is automated and more preferably data input is automated through awebsite accessible to the landowner. In one embodiment of the invention,the system receives site-specific data from the landowner, determines orobtains the geographic location of the parcel of land, identifies thesite-specific data, if any, and the general data relevant to that parcelof land stored in the database, identifies the business as usualscenario for the land parcel and submits the collected information tothe carbon sequestration modeling program. The system may furthercompare the data inputted by the landowner with the data from thedatabase to identify potential errors or mis-entries, which preferablymay be flagged for independent review.

The carbon sequestration modeling program then can calculate theavailable carbon reservoir, the incremental carbon stored since 1990 andthe incremental carbon projected to be stored for a specified timeperiod into the future, based on continuing the current land managementpractices and projecting other variables not dependent on the landowner,all as described above. The results can be subjected to an uncertaintyanalysis, preferably a Monte Carlo uncertainty analysis, again asdescribed above. Accrued and projected standardized CERCs can becalculated and compiled, with other incremental carbon storage beingquantified and held in a reserve pool.

The results of the analysis can be communicated to the landowner,preferably in a report and more preferably in a report directly throughthe interface. Preferably, the system can allow the landowner anopportunity to run the analysis multiple times for future scenarios,with the landowner or another selectively changing one or more of thevariables, in order to determine the impact of the change on thegeneration of standardized CERCs. For example, the landowner may desireto analyze the impact of changing the type of crops planted, the amountof fertilizer used, the frequency of irrigation, the level of tillage,the time of harvest, etc. The system allows the farmer to input anyvariable, or combination of variables, run the analysis and receive areport quantifying projected standardized CERCs. More preferably, thesystem identifies the variables that the landowner is able to change,identifies multiple choices for that variable and provides a mechanismfor the landowner to select one or more of the choices.

In a more preferred embodiment, the system comprises a computerinterface with the landowner, in which the landowner is requested toinput requested information regarding the location of the parcel of landand land management practices employed on an annual basis since at leastas early as 1990. More preferably, the information is requested in theform of multiple choice responses to particular inquires of landmanagement practices. The system can take the information inputted fromthe landowner, identify and obtain relevant information from thedatabase, submit the landowner and database information into a carbonsequestration modeling program, submit the results to an uncertaintyanalysis program, calculate accrued and projected standardized CERCsavailable for trade, as well as accrued and projected reserve CERCs, andgenerate a report for the landowner.

In an even more preferred embodiment, the landowner can input requestedsite-specific data via a website. The inputted data can beelectronically transferred, along with relevant data retrieved from theelectronically stored database containing the other site-specific data,if available, and general data relevant to that land parcel, to a carbonsequestration modeling program and to an uncertainty analysis program.From the results, standardized CERCs can be quantified, whether accruedor projected, and placed in a compilation of other standardized CERCsfrom other landowners. Results that do not meet the standards for astandardized CERC are placed in a compilation of other similar resultsand held as a reserve or indemnification pool. The compilation ofstandardized CERCs can be offered for trade on the open market.

More specifically, a more preferred embodiment of the inventioncomprises linkages between at least four components: 1) a website toobtain information from, and disseminate information to, one or morelandowners; 2) a database structure to store collected information fromthe one or more landowners; 3) a database structure, such as a generaldatabase, to store collected information from other sources relevant tocarbon sequestration; and 4) one or more data processors adapted to runa carbon sequestration modeling program and/or an uncertainty analysisprogram. The linkages allow information to be passed between thecomponents, and allow that actions in one component, such as thesubmission of a request from the website to “quantify the standardizedCERCs,” initiate a sequence of actions whereby each component performsits designated task in its designated order to produce the desiredresult.

In the more preferred embodiment, the linkages operate automaticallythrough a collection of computer programs, scripts and daemons, whichtogether pass the needed information between the components and initiatethe desired actions. For example, when the landowner submits a requestto quantify the standardized CERCs, the database transfers thelandowner's input data in a specific format to a specific directory onthe computer running the carbon sequestration model. A daemon in thatcomputer watches for information to appear and, when finding data in theinput directory, initiates a master script program. The master scriptprogram calls a geographic information system routine to process thesite location of the land parcel and obtain stored values in thedatabase for general data, such as soil texture, climate and generalland use history. These obtained values are placed in a data directoryand control is returned to the master script. The master script thencalls a set of Perl scripts which parse the appropriately formattedinput files required by the carbon sequestration model. The masterscript calls the carbon sequestration model to perform its program andthen the uncertainty analysis program to perform its program. Theresults are placed into a special output directory in specificallyformatted files and the master script deletes the input files to preventthe initiation of another run. A different daemon watches for outputfiles to appear and, when such output files are found, it calls a scriptto parse and interpret the results and a final report file containingthe standardized CERCs and uncertainty is produced. Another daemon onthe database system watches for this output file, transfers the resultsinto the database and notifies the landowner by an appropriate methodthat the results are completed and may be viewed, e.g., on the website.

Another embodiment of the invention comprises an apparatus to generateand quantify standardized CERCs, which may include an interface with thelandowner, a data structure adapted to store data relevant to carbonsequestration, such as land use history, soil texture and climate data,a data processor adapted to run a carbon sequestration modeling program,a data processor adapted to run an uncertainty analysis program and amechanism to generate and provide a report to the landowner. Theapparatus preferably is designed to allow individual landowners, orgroups of landowners, to input requested information and receive reportsquantifying accrued and projected standardized CERCs, as well as CERCsto be held in reserve.

Referring now to FIG. 5, an apparatus 100 comprises a producer interface110, an operator interface 120, a data structure 130 and a dataprocessor 140. Preferably, the producer interface 110 is adapted toreceive data input by a potential CERC producer, more preferably inresponse to particular inquiries regarding the geographic location andsize of the land parcel and its land use history. The producer interface110 also preferably is adapted to receive a report from the dataprocessor 140 and provide it to the potential CERC producer. Theoperator interface 120 is adapted to receive data by an operator,preferably geographically referenced general data relating to factorshaving an impact on carbon sequestration, such as climate, soil textureand land use history.

The data structure 130 is adapted to receive and store data from theproducer interface 110 and preferably also is adapted to receive andstore data from the operator interface 120. Alternatively, a separatedata structure (not shown) may be used to receive and store data fromthe operator interface 120. More preferably, the data structure 130 isadapted to receive and store site-specific data 112 from the producerinterface 110 and general data 122 from the operator interface 120. Asdescribed above, the general data 122 preferably is geographicallyreferenced.

The data processor 140 is adapted to identify the appropriate data fromthe data structure 130, including the data from the producer interface110 and the data from the operator interface 120. Preferably, the dataprocessor 140 is adapted to use the input geographic location of theland parcel to identify and obtain geographically referenced generaldata 122 stored in the data structure 130. The data processor 140 isadapted to use the site-specific data 112 and the identified generaldata 122 to determine the approximate change in the level of carboncompounds stored in the defined media over a specified period of time,preferably through the operation of a carbon sequestration modelingprogram.

Preferably, the data processor 140 also is adapted to receive theresults of this determination and the data on which they were based andconduct an uncertainty analysis, preferably a Monte Carlo uncertaintyanalysis, to quantify standardized CERCs and reserve CERCs.Alternatively, a separate data processor (not shown) may be used toconduct the uncertainty analysis. The data processor 140 also may beadapted to generate a report and provide the report to the potentialCERC producer, more preferably through producer interface 110.

In another embodiment of the invention, a system to generate, quantify,standardize, pool and trade carbon emission reduction credits isdisclosed. This system includes a method and apparatus to obtain dataand commitments from one or more potential CERC producer, combine theobtained data with data obtained from other sources, quantify accruedstandardized CERCs, projected standardized CERCs, and remaining carbonemission reductions not included in the standardized CERCs and compileaccrued and projected standardized CERCs for trade. Preferably, thecompiled accrued and projected standardized CERCs are marketed for tradeafter a certain quantity of such standardized CERCs has been compiled.

The accrued and/or projected standardized CERCs may be marketed or soldthrough a wide variety of means, including direct solicitation topotential CERC purchasers, advertising, auction, etc. Preferably, thestandardized CERCs are placed in the open market for sale or trade viaan on-line auction or through one or more on-line auction services.

In another embodiment of the invention, one or more other variableswhich limit the acceptance of a standardized CERC may be identified,analyzed, estimated or preferably quantified and communicated to thepotential CERC purchaser. This can operate to reduce, or preferablyremove, a variable for the potential purchaser, thereby increasing itsvalue to the CERC producer.

For example, the CERC requirement of ownership may be analyzed, anuncertainty determined and the conclusion presented to the potentialCERC purchaser. Preferably, the landowner is requested to provideinformation in response to questions directed to ownership and otherrights to the land that may have an impact on the ownership of CERCsgenerated from the prior or future land use. Such inquires may includethe identity of all entities with potential rights to ownership, use,occupation, easement, etc. of the land, the nature of such rights andthe parties practices. The inputted ownership information is compiledand can be directly communicated to the potential CERC purchaser.Preferably, the inputted ownership information is analyzed, whether by aperson or a program, to assess possible ownership issues and to providea report. Generally, a response that no such other entity exists woulddecrease the risk of an ownership issue, whereas a positive responsewould enable a potential CERC purchaser to more accurately assess such arisk.

Similarly, the requirements of leakage and permanence may be included inthe determination of establishing a standardized CERC. Preferablyadditional inquiries are submitted to the landowner designed toidentify, ascertain and assess issues related to leakage and/orpermanence of any CERCs generated through the management of the parcelof land. For example, to establish permanence, the landowner may berequired to certify the practice of a specific agricultural rotationsequence for defined time period. In a more specific example, thelandowner may document past land use history and certify the practice ofno-till wheat cultivation for three out of the next ten years. Based onlandowner submissions, a fraction of the CERCs generated, if any, can bestandardized for trade and a fraction can be held in reserve.

An example of the operation of one embodiment of the invention follows.A potential CERC producer accesses a website that includes backgroundand reference material, as well as an interactive interface capable ofreceiving and transmitting data. In response to an inquiry, thepotential CERC producer identifies a parcel of land by geographiclocation.

The geographic location is utilized to identify the specific land parceland the total area of the land parcel. The geographic location also isused to obtain general data relevant to carbon sequestration in soil forthat land parcel from a database containing geographically referencedgeneral data relevant to carbon sequestration in soil, such as land usehistory, climate and soil texture. A baseline level of business as usualcarbon emissions is also obtained, preferably from a database of suchbaseline levels referenced by geographic location and/or type ofactivity, such as farming. The relevant general data is input into acarbon sequestration model to determine whether the carbon reservoir ofthe soil is full. If it is full, the soil is not capable of satisfyingthe requirement of additivity and CERCs will not be generated. If thecarbon reservoir is not full, the potential CERC producer is prompted toprovide additional site-specific data.

The site-specific data requested may depend on the geographic locationof the land parcel. Typically, the potential CERC producer would berequested to identity, as accurately and as completely as possible,detailed land use history for each year since 1990, such as 1) the type,planting month and senescence of annual plants on the land; 2) the type,first growth month and senescence of perennial plants on the land; 3)the type of cultivation each month; 4) the type, form and amount of eachfertilizer each month; 5) the type and amount of organic matteradditions each month; 6) the type and amount of irrigation each month;7) the type and yield of harvest each month; 8) whether winter grazingor pasture grazing; and 9) if pasture grazing, the type and number ofanimals grazing each month.

The site-specific data may be tested. For example, if the site-specificdata is not complete, the website may prompt the potential CERC producerfor additional information. If the site-specific data is still notcomplete thereafter, the general database may be accessed to determineif general data is available to substitute for the missing site-specificdata. If such general data is obtained or used, the uncertainty analysisis adjusted to reflect the greater level of uncertainty of that data.Other tests also may be conducted, such as testing the site-specificdata to determine if it falls within prescribed ranges or values ofrelated general data from the database and comparing input data forspecific years to satellite-imagery to determine congruence.

The site-specific data, along with the general data relevant to the landparcel obtained from the general database, as well as the baselinelevel, are input into a carbon sequestration model to determine theapproximate change, if any, in the level of carbon compounds stored inthe soil since 1990. In this example, the potential CERC producer isonly requested to provide data back to 1990, while the database providesall data prior to 1990. Even with the use of such general data,standardized CERCs may be generated and quantified with reasonable andacceptable accuracy by the use of an uncertainty analysis.

The data input and therefore the results of the carbon sequestrationmodel are subjected to an uncertainty analysis, whereby the relativeuncertainty of the results can be quantified, based on a desiredconfidence threshold. The approximate change in the level of carboncompounds in the soil may then be expressed as standardized CERCs andreserve CERCs, accrued since 1990 to the date of the analysis. Theresults are communicated to the potential CERC producer through thewebsite.

The website also will allow a determination of the amount of futurestandardized CERCs that may be generated if the CERC producer were tocommit to certain actions into the future. For example, in response toinquiries, the potential CERC producer inputs data as to future actionsfor defined time periods, such as changing to no till agriculture forten years, or rotating soybeans and corn every other year for eightyears, etc. Preferably, the website identifies possible actions thatwould most increase standardized CERC generation, based on thesite-specific data and general data previously entered, and prompts thepotential CERC producer to select from one or more of a plurality ofchoices. The selected data is inputted, the carbon sequestration modelprogram and uncertainty analysis are conducted, future standardizedCERCs and future reserve CERCs are quantified and the results arecommunicated to the potential CERC producer.

The potential CERC producer optionally may request one or morealternative runs to determine the projected number of futurestandardized CERCs, based on changing selected input variables. Thepotential CERC producer preferably is given the opportunity tocontractually commit to a specific course of action for a specific timeperiod, and is awarded the number of projected future standardized CERCsand reserve CERCs based thereon.

The accrued standardized CERCs are placed into a pool of accruedstandardized CERCs with those of other CERC producers, the futurestandardized CERCs are place into a pool of future standardized CERCswith those of other CERC producers and the reserve CERCs are placed intoa reserve pool with those of other CERC producers. These pools,separately or in combination, may be offered for sale, preferably on theopen market though competitive bidding.

Because the landowner supplies much of the data used to generate andquantify standardized CERCs, the costs can be reduced. Because alandowner is not required to supply detailed land use history data orother data prior to 1990, and perhaps not even complete data after 1990,and is not required to supply other data such as climate data, greaternumbers of landowners can participate in generating CERCs andcontributing to a pool of CERCs with other landowners. Because theprocess to generate and quantify the standardized CERCs is transparentand reproducible, it is well suited for independent verification andauditing by third parties. Because the process is flexible, it may bemodified to respond to evolving carbon trading and greenhouse gasreduction policies and regulations and to incorporate evolvingtechnology and science findings. Overall, the method and apparatus ofthe present invention are designed to facilitate the participation ofindividual landowners in the CERC market, maximize the value of the CERCgenerated, increase the price paid to the CERC generator and lower therisk to the CERC purchaser.

The general database described herein may alternatively be used in avariety of resource management related issues. For example, a module canbe added that could be linked to soil-erosion and hydrology models. Alandowner could then enter the coordinates for a specific land parceland receive a plan for the specific locations of grassland buffer stripsthat would decrease soil erosion by specific amounts. Alternatively, amodule could be added to generate and quantify standardized CERCs basedon capturing methane emissions from manure storage and processinglagoons. These alternative projects share several common elements,including a customized data base, such as a general database, to defineimportant controlling variables, a producer-accessible interface forproject-specific data, linkages to data processors adapted to runnumerical models and data processors adapted to run uncertaintyanalyses. These systems are designed to readily adapt to current andevolving regulatory requirements.

The invention also may be advantageously applied to sequestration and/orreduction of emissions of greenhouse gases other than carbon dioxide.These greenhouse gases may include nitrous oxide and methane, or anyother greenhouse gas identified by the International Panel on ClimateChange (IPCC), regulatory agency or other authority. The invention alsomay be advantageously applied to reduction of business as usualgreenhouse gas emissions and/or sequestration into media other thansoil, such as trees, other vegetation, aquatic systems and marinesystems.

The invention also may be advantageously applied where CERCs areproduced as a consequence of substitution of renewable carbon, such asbiomass and/or methane from landfills, for fossils fuels. The specificmodule would be designed to define the CERC production and uncertaintyto normalize their value and document their compliance with regulatoryrequirements.

In another embodiment of the invention, one or more of the methodsdescribed herein can be used to quantify and normalize CERC generationfor businesses engaged in carbon sequestration projects or to othergreenhouse gas mitigation efforts, including, e.g., emissions of methanefrom animal feedlots and manure storage facilities. Modules can be addedto quantify CERCs that will meet the regulatory requirements fordocumenting CERC generation for those applications. This reduces andpreferably eliminates uncertainty for the potential CERC purchaser,thereby increasing the value of the CERC to the CERC producer.

In yet another embodiment of the invention, one or more of the methodsdescribed herein can be used by those who regulate and/or reportgreenhouse gas emissions and/or mitigation efforts. This would provideverification of local, regional, national and international greenhousegas reduction efforts.

A number of variations and modifications of the invention can be used.It would be possible to provide for some features of the inventionwithout providing others.

The foregoing discussion of the invention has been presented forpurposes of illustration and description. The foregoing is not intendedto limit the invention to the form or forms disclosed herein. In theforegoing Detailed Description for example, various features of theinvention are grouped together in one or more embodiments for thepurpose of streamlining the disclosure. This method of disclosure is notto be interpreted as reflecting an intention that the claimed inventionrequires more features than are expressly recited in each claim. Rather,as the following claims reflect, inventive aspects lie in less than allfeatures of a single foregoing disclosed embodiment. Thus, the followingclaims are hereby incorporated into this Detailed Description, with eachclaim standing on its own as a separate preferred embodiment of theinvention.

Moreover though the description of the invention has includeddescription of one or more embodiments and certain variations andmodifications, other variations and modifications are within the scopeof the invention, e.g. as may be within the skill and knowledge of thosein the art, after understanding the present disclosure. It is intendedto obtain rights which include alternative embodiments to the extentpermitted, including alternate, interchangeable and/or equivalentstructures, functions, ranges or steps to those claimed, whether or notsuch alternate, interchangeable and/or equivalent structures, functions,ranges or steps are disclosed herein, and without intending to publiclydedicate any patentable subject matter.

1. A computer-based method for generating standardized carbon emissionreduction credits for sequestration of carbon compounds, comprising:receiving via an automated inquiry and response system interface,site-specific data with respect to a geographic location, regarding atleast one variable impacting carbon sequestration, wherein the at leastone variable comprises site-specific land use practices; retrievingdata, general to a geographic region encompassing the location,regarding at least one variable impacting carbon sequestration, whereinthe at least one variable comprises regional historical land usepractices and the regional historical land use practice data is used tosupplement or substitute for site-specific land use practice data whichis unavailable; processing the site-specific data regarding the locationand the data general to the geographic region encompassing the location,through a carbon sequestration model running on a computer, to determinea change in level of carbon compounds stored at the location over aspecified time period; conducting by a computer an uncertainty analysison the change of the level of carbon compounds stored at the locationover the specified time period to quantify a relative level ofuncertainty of the change of the level of carbon compounds stored at thelocation over the specified time period via the computer, wherein theuncertainty analysis includes evaluating acceptability of the receivedsite-specific land use practice data by utilizing the general regionalhistorical land use practice data; from the uncertainty analysisconducted by the computer, utilizing the quantified relative level ofuncertainty to identify a quantity of carbon emission reduction creditswhich do not qualify as standardized carbon emission reduction creditsand cannot be traded as such and to identify a quantity of carbonemission reduction credits which qualify as the standardized carbonemission reduction credits for trading; and reporting from the computerthe identified quantity of the standardized carbon emission reductioncredits qualified for trading.
 2. The computer-based method of claim 1,wherein the uncertainty analysis comprises a Monte Carlo uncertaintyanalysis in which a plurality of simulations are conducted, each timerandomly assigning at least one value to at least one of a plurality ofkey input variables, wherein at least one distribution of values isdetermined and the quantified level of uncertainty is based on saiddistribution.
 3. The computer-based method of claim 2, wherein theplurality of simulation runs comprises at least 200 simulation runs. 4.The computer-based method of claim 2, wherein the plurality ofsimulation runs comprises at least 800 simulation runs.
 5. A system forgenerating standardized carbon emission reduction credits forsequestration of carbon compounds, comprising: a computer comprising atleast one data processor; at least one electronically stored databasecontaining data available to the at least one data processor of thecomputer and containing: site-specific data with respect to a geographiclocation, regarding at least one variable impacting carbonsequestration, wherein the at least one variable comprises site-specificland use practices; and data, general to a geographic regionencompassing the location, regarding at least one variable impactingcarbon sequestration, wherein the at least one variable comprisesregional historical land use practices and the regional historical landuse practice data is used to supplement or substitute for site-specificland use practice data which is unavailable; a carbon sequestrationmodeling program operable by the at least one data processor to processthe site-specific data and the data general to the geographic regionencompassing the location through a carbon sequestration model, todetermine a change in level of carbon compounds stored at the locationover a specified time period, wherein the uncertainty analysis includesevaluating acceptability of the received site-specific land use practicedata by utilizing the general regional historical land use practicedata; an uncertainty analysis program operable by the at least one dataprocessor to process the change of the level of carbon compounds storedin the soil at the location over the specified time period, to quantifya relative level of uncertainty of the change of the level of carboncompounds stored at the location over the specified time period withwhich to identify a quantity of carbon emission reduction credits whichdo not qualify as standardized carbon emission reduction credits andcannot be traded as such and to identify a quantity of carbon emissionreduction credits which qualify as the standardized carbon emissionreduction credits for trading; and at least one interface to thecomputer, for outputting a report of the identified quantity of thestandardized carbon emission reduction credits which qualify fortrading.
 6. The system of claim 5, wherein the uncertainty analysismodule comprises a Monte Carlo uncertainty analysis module in which aplurality of simulations are conducted, each time randomly assigning atleast one value to at least one of a plurality of key input variables,wherein at least one distribution of values is determined and thequantified level of uncertainty is based on said distribution.
 7. Thesystem of claim 5, wherein the plurality of simulation runs comprises atleast 200 simulation runs.
 8. The system of claim 5, wherein theplurality of simulation runs comprises at least 800 simulation runs.